Guidelines in the Processing of Refundable Income Tax Returns

April 1, 1966 REVENUE MEMORANDUM ORDER NO. 28-66 SUBJECT : Guidelines in the Processing of Refundable Income Tax Returns TO : All Internal Revenue Officers and Others Concerned In order to provide a uniform course of action on all refund cases involving withholding tax on wages, the following guidelines are hereby promulgated for compliance of all concerned: aisadc 1. All income tax returns in which the deduction claimed is the optional standard deduction should be released without the necessity of field investigation. 2. All income tax returns refunds amounting to P500.00 or more, where the itemized deductions claimed is 40% or more of the declared gross income, should be referred for field examination. 3. All income tax returns, wherein the proportion of the deductions to the gross income declared is less than 40%, may be processed and the corresponding refund warrant released, except when the returns contain doubtful and/or substantial items of deductions such as representation and entertainment, transportation, interests, losses, and sub-commission expenses, in which case the return should also be referred for field verification. 4. All income tax returns, regardless of the amount of the refund, where the taxpayer reported transactions resulting in a loss under schedules B, C, D and/or E, shall be referred for field examination. 5. In all cases where field examination is herein required, the assignment should be made before the corresponding refund warrant is released for signature. The examination authorized herein shall be made in accordance with the limitations provided for under Revenue Memorandum Order No. 14-65 dated May 10, 1965. 6. Refund checks should be mailed to the payees immediately after same are countersigned by the Auditor. 7. In instances where the taxpayers-refundees call for their checks personally, the same should not be released until the claimant has adequately identified himself. 8. Refund checks may be released to parties other than the taxpayer-refundees subject to the following requirements: (a) Where the amount of the check is less than P500.00, the representative should be required to submit a written authorization from the taxpayer and to present the latter's residence certificates A and B. Proper identification of the representative should further be required. (b) Where the amount of the check is P500.00 or more the representative should be required to submit a power of attorney. Proper identification of the attorney-in-fact should also be required. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue